Glaxo Wellcome was a major casualty as Goldman Sachs removed the shares from its list of buy recommendations. The US investment house, after reviewing Glaxo's key products, is now forecasting five-year compound earnings growth at 10-11 per cent, down from 13-14 per cent.
The shares, which had performed much better than many other Footsie constituents in the summertime slump, dropped 90p (after 138p) to 1,708p. They touched a 1,983p peak in January when excitement was running high over the proposed mega-merger with SmithKline Beecham which was subsequently aborted.
Glaxo suffered its wounding setback just ahead of what are thought to be encouraging drug developments. The pharmaceutical giant is expected over the weekend to produce evidence at a San Diego conference that Relenza, its flu drug, is effective. And, intriguingly in view of the Goldman caution, Glaxo may have other positive developments lined up for the San Diego meeting. It plans to release information on other key drugs including two HIV treatments, and hepatitis and asthma drugs.
Banks were hammered by BT Alex.Brown, which cut profit forecasts by an aggregate of 10 per cent. Barclays, off 72p to 993p, was chopped from pounds 2.8bn to pounds 2.3bn. The shares touched 1,949p in July.
Other bank shares hit by the BT axe included National Westminster Bank, down 42.5p to 845p, and Lloyds TSB, 29p to 661p.
Elsewhere Diageo, following its results, had to contend with lowered estimates, and the shares weakened 17.5p to 480.5p, lowest since the merger.
Cadbury Schweppes and Tate & Lyle were soured by SG Securities sell advice, with Cadbury 39.5p off at 788.5p and Tate 4.5p at 320p.
There were some analytical bulls around. Schroders liked water shares; Lehman Brothers and Williams de Broe alighted on Enterprise Oil and Sutherlands said buy the BTP chemical group, although it downgraded its profits estimate.
Footsie ended a ragged session off 106.6 points at 5,061. Fears that the hedge fund crisis could escalate, putting more pressure on the banks, weighed heavily on sentiment, obliterating any possible reward from the seeming inevitable march to lower interest rates.
With New York weak overnight and during London hours, and Far Eastern markets doleful, shares seemed set for a hiding from from the opening bell.
Supporting shares endured acute discomfort, with the mid and small cap indices hitting new lows for the year.
Centrica, the once neglected split from the old British Gas, had the distinction of topping the Footsie leader board for a time. The shares were 8p higher until they lost ground and had to settle for a 4p gain to 121p, a closing peak. Their achievement stems from Centrica's electricity expansion and expectations of gas exports, particularly to Italy. BG, the other half of the gas demerger, rose 12.75p to 393.75p.
Punch-drunk Bass, down from a 1,175p high, recovered a modest 17p to 653p, and EMI, up 17.25p to 353p, was another to attract bargain hunters.
Asda improved 2.25p to 169.25p after the Credit Lyonnais sell drubbing, and Kingfisher's decision to merge its B&Q offshoot with Castorama Dubois of France was well received, helping the shares 14p higher to 525p.
Business Post, the delivery group, continued to encounter fallout from its boardroom brawl. The shares dipped another 15p to 225p, lowest for three years. They topped 950p in the spring.
Another devastated share, Ionica, fell a further 7.25p to 14.75p. Last year they touched 421p. The latest setback followed an announcement that the fledgling telephone group may be rescued - but at a price below the market level.
Wiggins, the property developer raising pounds 4.4m through a rights issue at 10p, shaded 0.5p to 11p.
Parkland, the textile group, held at 31.5p. There are suggestions it could follow the example of the wool group John Haggas and go private. .
Profit warnings continued to appear. Eldridge Pope, the brewer-turned- pub owner, lost 37.5p to 141.5p after complaining about summer trading in its pubs. Panmure Gordon, the company's stockbroker, slashed its year's profits estimate from pounds 6.2m to pounds 5.5m.
Alpha Airports, ahead of figures, fell 8.5p to 38.5p; the department stores chain House of Fraser, another with results next week, fell 4p to 89.5p. A loss of around pounds 1.7m is expected.
The electronic nose group Aromascan slumped 1p to 4.5p after revealing a rescue pounds 2.7m cash call. The rights price is 2p. The shares were floated four years ago at 100p and touched 182p.
SEAQ VOLUME: 848.8m
SEAQ TRADES: 63,031
GILTS INDEX: n/a
LEEDS GROUP, the textile concern, slipped to a new year's low of 38.5p. Although operating in an unfashionable industry, the shares could be oversold. The company has said it intends to pay a 4.6p final dividend, which puts the shares on a 22.4 per cent yield. The p/e is 2.5.
Cash was pounds 4.3m in the last balance sheet, which could be bolstered by a litigation settlement.
A LEADING US investment fund has taken a shine to a member of the beerage - Wolverhampton & Dudley Breweries, which is carrying out a share buy-back programme. Tweedy Browne has picked up nearly 2.2 million shares and now has a 3.86 per cent. The Wolves shares, like those of most regional brewers, bump along near a five-year low. They held at 396p; in June they hit 556p.